Chamber reacts to tax increase

The Grenada Chamber of Industry and Commerce (GCIC) is seeking a meeting with Minister for Economic Development, Trade, Planning and Cooperatives, Oliver Joseph to raise concerns over the recent hike in the Customs Service Charge (CSC).

The cash-strapped Keith Mitchell-led New National Party (NNP) government increased the CSC from 5% to 6% in order to raise more revenue for the island’s Treasury.

Industry sources believe that the increase is part of government’s attempts to satisfy the Washington-based International Monetary Fund (IMF) that the administration is taking steps to address the severe fiscal situation facing Grenada.

The island has defaulted on loan repayments to its international creditors and announced a 3-year Structural Adjustment Programme (SAP) with a number of austerity measures to address the fiscal crisis.

In an interview with THE NEW TODAY newspaper, GCIC President Aine Brathwaite said that the island’s leading private sector body feels “unsettled” after discovering the 1% increase on the tax by the one-year old government.

Brathwaite said that there was no discussion between government and the Chamber on plans to effect the one percent increase on the tax and they became aware of it after it was gazetted.

“It was surprising, we didn’t expect it”, she told the New Today adding that this development would most likely result in an increase in the cost of goods to consumers.

Several private sector officials have told this newspaper that they do not intend to absorb the increase but pass it on to customers.

Mitchell’s NNP was backed heavily by the local private sector as it defeated the incumbent National Democratic Congress (NDC) of Tillman Thomas 15-0 in the February 2013 national elections.

The amendment to the tax rate was passed at a sitting of the Lower House of Parliament two weeks ago.